| 1 | 1 | | By: Deshotel H.B. No. 4397 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to payoff statements provided in connection with certain |
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| 7 | 7 | | home loans. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. Subchapter B, Chapter 343, Finance Code, is |
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| 10 | 10 | | amended by adding Section 343.106 to read as follows: |
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| 11 | 11 | | Sec. 343.106. PAYOFF STATEMENTS. (a) In this section, |
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| 12 | 12 | | "mortgagee," "mortgage servicer," and "mortgagor" have the |
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| 13 | 13 | | meanings assigned by Section 51.0001, Property Code. |
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| 14 | 14 | | (b) The finance commission shall adopt rules governing |
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| 15 | 15 | | requests by title insurance companies for payoff information from |
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| 16 | 16 | | mortgage servicers related to home loans and the provision of that |
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| 17 | 17 | | information, including rules prescribing a standard payoff |
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| 18 | 18 | | statement form that must be used by mortgage servicers to provide |
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| 19 | 19 | | those payoff statements. |
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| 20 | 20 | | (c) In adopting rules under Subsection (b), the finance |
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| 21 | 21 | | commission shall require a mortgage servicer who receives a request |
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| 22 | 22 | | for a payoff statement with respect to a home loan from a title |
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| 23 | 23 | | insurance company to deliver the requested payoff statement within |
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| 24 | 24 | | a time prescribed by finance commission rule, which must allow the |
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| 25 | 25 | | mortgage servicer at least three business days after the date the |
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| 26 | 26 | | request is received to deliver the payoff statement. |
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| 27 | 27 | | (d) The standard payoff statement form prescribed by the |
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| 28 | 28 | | finance commission under Subsection (b) must require that a |
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| 29 | 29 | | completed form: |
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| 30 | 30 | | (1) state the proposed closing date for the sale and |
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| 31 | 31 | | purchase of the real property securing the home loan or for any |
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| 32 | 32 | | other transaction that would involve the payoff of the home loan or |
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| 33 | 33 | | other debt secured by the property, as specified by the title |
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| 34 | 34 | | insurance company's request; and |
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| 35 | 35 | | (2) provide a payoff amount that is valid through that |
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| 36 | 36 | | date. |
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| 37 | 37 | | (e) Except as provided by Subsection (f) or (g), if the |
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| 38 | 38 | | mortgage servicer provides a completed payoff statement form that |
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| 39 | 39 | | meets the requirements of this section and rules adopted under this |
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| 40 | 40 | | section in response to a request for a payoff statement, the |
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| 41 | 41 | | mortgage servicer or mortgagee may not demand that a mortgagor pay |
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| 42 | 42 | | an amount in excess of the payoff amount specified in the payoff |
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| 43 | 43 | | statement. |
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| 44 | 44 | | (f) If a mortgage servicer or mortgagee discovers that an |
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| 45 | 45 | | error has been made in a payoff statement, the mortgage servicer or |
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| 46 | 46 | | mortgagee may correct and deliver the statement on or before the |
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| 47 | 47 | | second business day before the specified closing date. The |
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| 48 | 48 | | corrected payoff statement must be delivered to the requestor by: |
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| 49 | 49 | | (1) certified mail with return receipt requested; and |
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| 50 | 50 | | (2) electronic means, if the requestor provides the |
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| 51 | 51 | | mortgage servicer with a means to deliver the corrected statement |
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| 52 | 52 | | electronically. |
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| 53 | 53 | | (g) If a mortgage servicer makes an error in a payoff amount |
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| 54 | 54 | | contained in a payoff statement that results in the mortgage |
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| 55 | 55 | | servicer requesting an amount that is less than the correct payoff |
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| 56 | 56 | | amount, the mortgage servicer or mortgagee fails to correct the |
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| 57 | 57 | | payoff statement in accordance with Subsection (f), and the |
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| 58 | 58 | | mortgage servicer receives payment in the amount specified in the |
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| 59 | 59 | | payoff statement, the difference in the amount included in the |
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| 60 | 60 | | payoff statement and the correct payoff amount becomes an unsecured |
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| 61 | 61 | | liability of the former mortgagor owed to the mortgagee. |
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| 62 | 62 | | (h) If the mortgage servicer receives payment in the amount |
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| 63 | 63 | | specified in the payoff statement, including any corrected |
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| 64 | 64 | | statement provided in accordance with Subsection (f): |
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| 65 | 65 | | (1) the home loan and other obligations covered by the |
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| 66 | 66 | | payoff statement, if any, are considered paid in full; and |
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| 67 | 67 | | (2) the mortgagee shall execute and deliver to the |
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| 68 | 68 | | mortgagor, within a reasonable time after payment, a release of the |
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| 69 | 69 | | lien on the real property securing the home loan and any other |
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| 70 | 70 | | obligations, or a copy of an endorsement and assignment of the lien |
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| 71 | 71 | | to a lender that is refinancing the home loan. |
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| 72 | 72 | | SECTION 2. (a) As soon as practicable after the effective |
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| 73 | 73 | | date of this Act, the Finance Commission of Texas shall adopt the |
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| 74 | 74 | | form required by Section 343.106, Finance Code, as added by this |
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| 75 | 75 | | Act. |
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| 76 | 76 | | (b) Notwithstanding Section 343.106, Finance Code, as added |
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| 77 | 77 | | by this Act, a mortgage servicer is not required to comply with that |
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| 78 | 78 | | section until the Finance Commission of Texas adopts the form |
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| 79 | 79 | | required by that section. |
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| 80 | 80 | | SECTION 3. This Act takes effect September 1, 2009. |
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